From
[email protected] Sep 12 22:52:13 1995
Date: Mon, 11 Sep 1995 07:24:44 -0700 (PDT)
From: IATP <
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To: Recipients of conference <
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Subject: NAFTA & Inter-Am Trade Monitor 9-8-
NAFTA & Inter-American Trade Monitor
Produced by the Institute for Agriculture and Trade Policy
September 8, 1995
Volume 2, Number 24
__________________________________________
Headlines:
- FREE TRADE IMPACT ON LABOR
- U.S.-MEXICO AG TRADE ISSUES
- PERU CHANGES AGRARIAN LAWS
- BANANA WAR UPDATE
- REGIONAL TRADE ALLIANCES MEET
- MEXICAN NATIONAL CONSULTATION DRAWS ONE MILLION PLUS
__________________________________________
FREE TRADE IMPACT ON LABOR
In Mexico, industry groups and the government are pressing
labor unions to make concessions, including change from a
daily to an hourly wage in some industries, hiring more non-
union workers, and greater management freedom in hiring and
firing part-time workers. Some unions agree that a "new
labor culture" is needed, while others say that the phrase is
a euphemism for reducing legal protections for workers. An
independent union leader in the auto sector, Benedicto
Martinez, says business is taking advantage of the situation:
"We can fight for better pay or we can fight to maintain
jobs." Since the peso was devalued last December, at least
one million of Mexico's 35 million jobs have disappeared, and
Mexico's economy continues to slow, contracting by 10.5
percent in the second quarter of 1995.
In the United States, skilled workers are watching as their
jobs move overseas. "Information age" jobs that require
computer skills can be done anywhere that computers, modems,
and telephone cables are available, and white-collar jobs are
moving to lower-wage sites around the globe. One example:
Sea-Land, a division of the CSX Corporation, shut down
offices in New Jersey and contracted the computer programming
work previously done by approximately 300 U.S. workers in New
Jersey to programmers in India and the Phillipines.
Experienced programmers in India earn $1,200 to $1,500
monthly, compared to $4,000 and up in the United States.
Blue-collar jobs in the United States remain at risk, both
when companies move abroad and when they use the threat of
moving to control employees. B.W. Harris Manufacturing
Company recently closed a plant in West St. Paul, MN, moving
its clothing manufacturing to the Caribbean. Like many other
manufacturers, Harris will cut cloth in Florida, ship it to
the Caribbean Basin for sewing, and sell the finished
clothing in the United States. Caribbean manufacturers
benefit from U.S. Caribbean Basin Initiative and Section 807
trade legislation. The number of U.S. textile and apparel
industry jobs has declined from more than 1.1 million in 1985
to 969,400 in 1994, according to the U.S. Bureau of Labor
Statistics. In contrast, Caribbean Basin countries have
increased apparel exports to the United States by more than
25 percent to $2.45 billion during the first quarter of 1995,
while Mexican apparel exports rose by 60 percent to $1.35
billion.
Among U.S. workers feeling the pressure of the threat of
moving abroad are workers at Leaders Manufacturing Inc. in
Willmar, MN, who met this summer to begin organizing a union.
One organizer has been fired and some workers report that the
company's personnel director showed up at an organizing
meeting and threatened to move jobs to Mexico if a union was
voted in. Company officials declined to discuss the charges.
Dianne Solis, "Mexico's Economic Crisis Pushes Unions to
Consider Concessions," WALL STREET JOURNAL, August 25, 1995;
"Mexican Recession Worse; Output Off 10% in Quarter," NEW
YORK TIMES, August 17, 1995; Keith Bradsher, "Skilled Workers
Watch Their Jobs Migrate Overseas," NEW YORK TIMES, August
28, 1995; Tom Fredrickson, "B.W. Harris Shifts Work to
Caribbean," CITY BUSINESS, August 31, 1995; Jill Hodges,
"Workers at Willmar Manufacturing Company Press On With Their
Effort to Organize a Union," STAR TRIBUNE, July 15, 1995;
Canute James, "Caribbean Sees Jump in Apparel Exports to US,"
JOURNAL OF COMMERCE, August 31, 1995.
U.S.-MEXICO AG TRADE ISSUES
California growers, last year enthusiastic about increased
exports to Mexico under NAFTA, have seen those exports fall
dramatically in the wake of Mexico's economic crisis. Tomato
sales to Mexico, which grew from 600,000 25-pound cartons in
1992 to 2.25 million in 1994, have been cut by 95 percent
this year. California wine exports to Mexico, which went
from $2.3 million in 1990 to $6.8 million in 1994, totaled
only $547,000 in the first half of 1995. California growers
blame both the Mexican economic crisis and border crossing
problems that never have been resolved. If border officials
hold up a shipment for paperwork, perishable produce loses
value.
The USDA's Animal Plant Health Inspection Service (APHIS)
scheduled hearings on its proposal to partially lift a ban on
Hass avocados from Mexico, allowing their entry to 19
northeastern U.S. states each year from November through
February. According to APHIS, cold weather would kill the
pests that have been the reason for the 81-year-old U.S. ban
on Mexican avocado imports. California's $1 billion avocado
crop, 90 percent of U.S. avocado production, is sold almost
entirely in the U.S. at prices two to three times higher than
prices for Mexican avocados.
More than one thousand California avocado farmers packed a
USDA hearing in Escondido, insisting that their opposition
was based on fear of pests, not fear of competition.
Outraged voices on the Internet also protest avocado import
proposals: "The Mexican Avocados have been banned because of
insects for years because of the bugs down there that we
don't have here. ... I don't think bringing in avocados that
may have worse bugs will help us control bugs. ... Can
someone tell me why bringing in these avocados will help
avocado farmers here in the good old U.S.A. How can they
quarantine our fruit and not let us sell it yet welcome the
Mexican fruit that may well destroy our market?"
USDA officials are also considering ways to transport Mexican
mangoes, possibly carrying fruit flies, larvae, or pupae,
through the United States to Canada. Shippers and exporters
want to simply ship through the U.S. in sealed containers,
but the USDA points out that larvae and pupae could fall out
of the containers when they are being hauled back to Mexico,
and that there are no controls on where the containers or
trailers go after the mangoes are unloaded in Canada.
Mangoes exported to the United States must have a U.S.-
supervised hot water bath to kill fruit flies before entry
into the country.
Montieth Illingworth, "Mexican Slump Nips Farm Trade in Bud,"
JOURNAL OF COMMERCE, August 21, 1995; Kevin G. Hall, "USDA
Aims to Block Mexico-Canada Flyway," JOURNAL OF COMMERCE,
August 25, 1995;
[email protected], INTERNET POSTING,
August 15, 1995; Bill Mongelluzzo, "Growers Emphatic in
Support of Ban on Mexican Avocados," JOURNAL OF COMMERCE,
September 1, 1995.
PERU CHANGES AGRARIAN LAWS
In mid-July, 27 years after Peru's land reform law was
instituted by General Juan Velasco's left-wing military
regime, all limits on landholding were abolished. Proponents
said that larger agro-industrial operations are necessary to
produce efficiently for export. Investors and agri-business
are expected to buy up thousands of hectares along the
Peruvian coast from cooperatives that have administered the
tracts since the Velasco reform.
Opposition leaders argued unsuccessfully that the abolition
of limits on landholding will bring a return of latifundios -
- large estates farmed with semi-feudal labor. The neo-
liberal majority in Congress sees large estates as desirable,
and is preparing companion legislation to change irrigation
and water laws and set market prices for water. Both the
land and water legislation have been strongly advocated by
the World Bank and the Inter-American Development Bank, which
have pledged a billion dollars in loans over the next three
years to rehabilitate drainage and irrigation infrastructure.
Sally Bowen, "Peru Set to Sweep Away 27-Year-Old 'Land
Reform' Laws," FINANCIAL TIMES, July 18, 1995.
BANANA WAR UPDATE
Throughout 1995, the United States has threatened retaliatory
trade sanctions under its Section 301 trade law to penalize
the European Union (EU) for its banana regime. The most
recent U.S. deadline for EU changes is October 17. Colombia
and Costa Rica are also potential targets of the Section 301
sanctions. [See NAFTA & Inter-American Trade Monitor, April
28, 1995.] In August, the U.S. also said that it will
initiate a complaint against the EU policy before the World
Trade Organization.
The EU banana regime uses a combination of quotas, tariffs,
and export licenses to favor imports from former colonies in
Africa, the Caribbean and the Pacific. Complicating matters,
four Latin American banana producers -- Colombia, Costa Rica,
Nicaragua, and Venezuela -- signed the so-called "banana
framework agreement" with the EU, agreeing to shelve
challenges under the World Trade Organization (WTO) rules in
exchange for somewhat-improved country quotas. Ecuador --
the world's largest banana producer -- and other Latin
American countries objected to the framework agreement.
On the request of the Hawaii Banana Industry Association and
Chiquita Brands International, the world's largest banana
trader, the U.S. Trade Representative (USTR) began an
investigation of the EU preferences for Caribbean bananas.
Latin America produces about 75 percent of the world's
bananas, and Chiquita Brands controls 65 percent of the
market. The U.S.-based companies object to preferences for
Caribbean producers and to provisions of the EU banana regime
that give Latin American countries greater authority to
allocate export licenses to companies.
Caribbean countries attending a Washington meeting of
hemispheric defense ministers in early August sought to
refocus discussions on hemispheric security toward what they
see as a United States war on their banana producers.
Speaking for the Caribbean countries, which have small armies
or none at all, Jamaican Ambassador Richard Bernal said that
"the key is economic development." Antigua and Bermuda's
Ambassador Patrick Lewis agreed, telling reporters, "I think
the enemy is ourselves unless we can work together."
In July, EU farm ministers rejected a call by the European
Commission, the EU executive agency, to increase Latin
American import quotas by 350,000 tons. France, Britain and
Spain insist that they will not accept changes in the EU
banana regime. Germany, Belgium, the Netherlands,
Luxembourg, Austria, Finland, and Sweden want to increase the
Latin American quota and change the distribution and
allocation of export licenses. The European Commission will
report in September on proposed modifications to the EU
banana regime.
Yvette Collymore, "Caribbean-Trade: New 'Enemies' Pose as
Friends," INTERPRESS SERVICE, August 9, 1995; Debra Percival,
"U.S. Demands May Lead to Modification of EU Regime,"
INTERPRESS SERVICE, July 25, 1995; Canute James, "Caribbean
Banana Exporters Hit US Stance on EU Regime," JOURNAL OF
COMMERCE, July 13, 1995; Bruce Barnard, "European Commission
May Seek OK to Talk Bananas With Washington," JOURNAL OF
COMMERCE, July 24, 1995; Debra Percival, "EU May Change
Regime in Bid to Please Washington," INTERPRESS SERVICE, June
7, 1995; Silvio Hernandez, "Banana War Looms," INTERPRESS
SERVICE, May 16, 1995; Bill Rodgers, "U-S/Latam Bananas,"
VOICE OF AMERICA, May 24, 1995; Tom Karst, "Trade Debate
Arises as Market Ascends," THE PACKER, May 22, 1995; "U.S.
Plans Trade Appeal in Europe Banana Case," NEW YORK TIMES,
August 19, 1995.
REGIONAL TRADE ALLIANCES MEET
When Mercosur member nations (Argentina, Brazil, Paraguay,
Uruguay) met in Paraguay this summer, the world's fourth-
largest trading bloc agreed to expand, beginning talks to
admit Chile and Bolivia. Moving beyond the common external
tariff that was implemented on January 1, the summit included
discussion of cultural, currency, and other integration.
Argentine President Carlos Menem called for progress toward a
common currency, but called eradication of poverty and
unemployment the greatest challenge facing Mercosur members.
The Bolivian and Chilean presidents called for progress on
physical infrastructure links, such as highways, railroads,
and ports.
Both Chile and Bolivia are negotiating with Mercosur, with
Chile expecting to reach an agreement by the end of the year,
and Bolivia's president predicting an agreement with Mercosur
by the end of June. Cultural officials of Mercosur countries
and Bolivia signed an agreement to promote cultural
cooperation, including a regional calendar of cultural
events, joint publication of a basic collection of works by
Mercosur authors, and linkage of national libraries and data
centers.
Disagreements among member nations included the dispute
between Brazil and its Mercosur partners over import quotas
imposed by Brazil on motor vehicles and other items. Brazil
exempted other Mercosur countries from its limits on vehicle
imports, defusing the biggest conflict at the meeting. Trade
among Mercosur member nations has tripled during the past
four years.
Central American countries lack a strong trade pact, though
trade within the region has grown from $750 million in 1990
to more than $1.4 billion in 1994. While several bilateral
pacts, such as agreements between Costa Rica and Mexico or
Nicaragua and Mexico, are pending or in place, severe
national economic problems remain the main preoccupation of
Central American nations.
The Central American nations are included in the world's
newest trade bloc, the Association of Caribbean States (ACS),
together with members of the 14-nation Caribbean Community
(Caricom), the Group of Three (Colombia, Mexico and
Venezuela), Cuba, the Dominican Republic, and Haiti, and 15
dependent territories in the region. Citing NAFTA to the
north and Mercosur to the south, a Venezuelan delegate to the
August ACS meeting warned that, "We in this region are likely
to be either squeezed, or left out, or both, and we cannot
allow this to happen."
Caricom already has a common external tariff and is moving
toward lower tariffs and a common currency. The ACS has the
potential to be one of the world's largest trade blocs, but
it has just begun work on significant regional issues: trade,
transportation, and tourism in the region.
George Meek, "Mercosur," VOICE OF AMERICA, August 3, 5, 7
1995; Mario Osava, "Trade Bloc Fraught With Constant
Bickering," INTERPRESS SERVICE, August 4, 1995; Marcela
Valente, "Argentina Calls for Realism, Flexibility and
Goodwill," INTERPRESS SERVICE, August 5, 1995; Maricel
Sequiera, "Central America: Regional Pacts Need Updating,"
INTERPRESS SERVICE, July 5, 1995; Maricel Sequiera, "Central
America: Towards Integration, With Eyes Wide Open,"
INTERPRESS SERVICE, June 26, 1995; Wesley Gibbings,
"Caribbean Meets on Tourism, Trade and Transportation,"
INTERPRESS SERVICE, August 11, 1995; Scott West, "Caribbean:
Regional Grouping Moves Slowly Towards Common Market,"
INTERPRESS SERVICE, July 24, 1995; Canute James, "Beachhead
Against Shifting Trade," "Caribbean Leaders Meet to Forge
Trade Bloc," FINANCIAL TIMES, August 17, 1995; Ian Elliott,
"U.S., EU Watch as Mercosur Gains Market Strength,"
FEEDSTUFFS, August 21, 1995.
MEXICAN NATIONAL CONSULTATION DRAWS ONE MILLION PLUS
The August 27 National Consultation for Peace and Democracy,
an unofficial plebiscite sponsored by the rebel Zapatista
National Liberation Army (EZLN), won the participation of 1.2
million Mexicans. The number of voters was about three
percent of the turnout for the 1994 national elections, with
heaviest participation in southern states and Mexico City.
The number was far greater than the 330,000 who voted in a
plebiscite on home rule for Mexico City in 1993 or the
631,193 who voted in a plebiscite on national policy last
February.
Early returns showed 97.4 percent of participants supporting
EZLN demands for land, justice, democracy, education, and
social development and 92.5 percent backing the idea of a
"broadbased opposition front" to work for their goals, with
94.3 percent calling for "profound political reform" in
Mexico. More than half of the voters -- 53.2 percent --
voted for the EZLN to become a "new, independent political
force," while 48.1 percent voted in favor of coalition with
other organizations.
The grassroots plebiscite was administered by the Civic
Alliance, a non-governmental election monitoring group, and
financed by individual donations and fundraising concerts and
dances. Voters came to 10,032 tables around the country, and
55,000 votes from outside the country, including more than
9,000 from the US, were registered. Voters produced
identification and had their hands stamped with indelible ink
when they voted.
The government generally honored its pledge of non-
interference, though some unidentified persons videotaped or
photographed voters, and government officials prevented
tables from being set up in two towns in Oaxaca and some
parts of Mexico City.
"Mexicans Vote for Rebels to Form Independent Political
Force," WEEKLY NEWS UPDATE ON THE AMERICAS, September 3,
1995; "National Consultation for Peace and Democracy,"
MEXPAZ, August 29, 1995.
___________________________________________
Produced by the Institute for Agriculture and Trade
Policy, Mark Ritchie, President. Edited by Mary C.
Turck. The NAFTA & Inter-American Trade Monitor is
available free of charge to Econet and IATPNet
subscribers. For information about fax or mail
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Institute for Agriculture and Trade Policy, 1313 5th
Street SE, Suite 303, Minneapolis, MN 55414. Phone: 612-
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[email protected]. For
information about IATP's contract research services,
contact Dale Wiehoff at 612-379-5980, or e-mail:
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